Spotlight

Indian equity markets are likely to extend their recovery after the strong rebound in the previous session, with easing crude oil prices, amid hopes of a de-escalation in the Middle East conflict, providing additional support to investor sentiment.  However, the sustainability of the recovery will depend on global market cues, further progress in U.S.–Iran negotiations and the broader direction of investor sentiment. 

Global signals remain mixed. Wall Street ended Monday’s session on a mixed note, with the Dow Jones advancing as oil prices retreated, while the S&P 500 and Nasdaq came under pressure amid concerns over escalating artificial intelligence spending and elevated technology-sector valuations. Investors are also adopting a cautious stance ahead of the U.S. midterm elections, with the outcome likely to influence expectations surrounding fiscal policy, government spending and bond yields.

Meanwhile, Asian markets are trading lower, with South Korea's KOSPI declining by over 3%, reflecting continued pressure on technology stocks and concerns surrounding AI-related investments. Japan's Nikkei 225 remains closed for a national holiday. 

Crude oil prices have pulled back sharply, with WTI crude trading around $96–97 per barrel following its steepest single-day decline in more than three months, as hopes of progress in U.S.-Iran diplomatic negotiations improved sentiment.  Iranian and Qatari officials have reportedly held several rounds of discussions aimed at ending the conflict, with a draft proposal said to be under consideration. However, the conflict remains unresolved, and the Strait of Hormuz continues to be a critical risk to global energy supplies. 

A sustained de-escalation in geopolitical tensions and further moderation in energy prices could support the ongoing recovery. However, a breakdown in negotiations or continued weakness in global technology stocks could revive volatility, weigh on broader risk appetite and influence global capital flows.

 
Technical View

Nifty 50

Nifty 50 is indicating an improvement in its short-term technical structure, supported by a sustained recovery and a move above the 50-day EMA. The immediate resistance zone is placed around 23,500–23,600. A sustained breakout above this range, backed by strong buying participation, could extend the recovery towards 23,800–24,000.

On the downside, 23,200 remains the immediate support level. Sustaining above this mark will be crucial to preserve the recovery and maintain positive short-term momentum. However, a decisive break below 23,200 could trigger profit booking and lead to 23,000. The near-term outlook remains cautiously bullish, while a decisive breakout above 23,600 would strengthen the case for further upside.

Bank Nifty

Bank Nifty's recent gains have remained modest, indicating relatively weaker participation from banking stocks. The index has moved marginally above its 20-day EMA, suggesting some improvement in short-term momentum. However, it continues to trade below its 50-day, 100-day and 200-day EMAs, keeping the broader technical structure relatively weak. On the upside, 55,200 remains the immediate resistance level, while a decisive move above 55,500 could strengthen the recovery and open the way towards the next resistance zone of 56,000.

On the downside, 54,600–54,400 remains the crucial support zone. A decisive break below 54,400 could revive selling pressure and expose the index to the next support range of 54,000–53,800. The technical outlook is turning cautiously bullish, although the recovery remains tentative. Sustained trading above 55,000–55,200 will be important to reinforce positive momentum and support further upside.

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Analyst Certification: I/We, Ajith Kamti Research Analyst, authors, and the name subscribed to this report, hereby certify that all the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. NISM Research Analyst registration number – NISM-202500242249.